New business wins from the Republic helps Northern Ireland economy grow

However overall business activity growth was lower than expected in April

The retail sector saw a significant slowdown in activity and new orders since the turn of the year. Photograph: Dominic Lipinski/PA Wire

Northern Ireland firms enjoyed another increase in new orders from customers in the Republic last month latest research shows.

According to Ulster Bank’s Purchasing Managers Index (PMI) for April new business wins from the south helped the North’s private sector grow at a faster rate than the UK average and encouraged them to take on new staff last month.

The PMI report, published on Monday, shows that while increased demand from the Republic helped fuel a jump in export sales last month Northern Ireland companies also won new orders from abroad which contributed to a “modest acceleration in business activity growth in April”.

But Richard Ramsey, chief economist Northern Ireland, Ulster Bank, said overall business activity growth had been lower than expected in the North in April which was in direct contrast to the Republic’s performance.

The economy in the south had, he said, “rebounded with vigour” from the impact of the “Beast from the Easter” weather-related factors in March.

Mr Ramsey believes this suggests that Northern Ireland is struggling with “underlying issues”.

According to the latest PMI report businesses in the North said they had been hit by “unfavourable exchange rate movements, higher energy prices and wage increases” which in turn all drove up operating expenses in April.

Mr Ramsey added: “In terms of the sub-sectors, services was the fastest growing in April, but it is still growing at well-below its pre-downturn, long-term average. Manufacturing, on the other hand, is holding up well relative to its long-term average, despite slowing last month.

“Construction saw business activity close to stagnation and order books falling for the second month in a row. Meanwhile retail has seen a significant slowdown in activity and new orders since the turn of the year”.

Latest industry research from the Northern Ireland Retail Consortium (NIRC) also supports the bank’s findings.

During April it found the number of people out shopping on high streets, retail parks and shopping centres in the North had fallen sharply.

Aodhán Connolly, director, NIRC, said there was a decrease in shopper footfall in Northern Ireland last month of 7.3 per cent which was the “poorest performance in two and a half years”.

“Some of this drop can be attributed to inclement weather and the timing of the Easter holidays, as well as the continued shift to online shopping,” he said.

The latest retail research also shows that although the local shop vacancy rate has dropped to 14.2 per cent Northern Ireland still has the highest empty shop rate across the UK.